LANSING, Mich. — It’s not taught in very many schools, but knowing how to live within one’s means is a critical life skill. That’s why credit unions are giving Michigan teens a dose of financial reality this month.
By giving teenagers a chance to simulate having a full-time job and paying bills, said Ken Ross, executive vice president of the Michigan Credit Union League, they get a hands-on lesson in good financial habits before it’s too late.
“They form a budget,” he said. “They make choices about how they want to spend their limited resources, and then they see the consequences of those decisions play out for them. “
As part of Financial Literacy Month, teen “reality fairs” will take place across Michigan this month. Saturday kicks off MoneySmart Week, with many credit unions hosting events and educational opportunities throughout the state for people of all ages. More information is online.
Ross said it won’t be long before many teenagers will find themselves on their own for the first time, whether in college or in the workforce, and making the wrong choices with their finances can lead them down a deep hole.
“Very often, people find themselves filling that hole by going to less than savory or fringe-type lenders,” he said, “folks like in the payday lending community, or other high-cost credit cards.”
In the age of online banking, mobile deposits and instant payments, many Michigan teens might not physically write out many checks or manually balance a checkbook in their lifetime, but Ross stressed that the fundamental skills never will be outdated.
“Understanding what your revenues are – your income – and what your expenses are, and matching those up so that you stay within a budget are still critically important foundational skills that every person coming out of high school and college really needs to have,” he said.
Ross added that teens who can’t attend the “reality fairs” still can get financial counseling at their local credit union. A listing of credit unions in the state can be found at CULinkMichigan.com.